Greek Crisis Won’t Lead to Repatriation of Earnings by U.S. Corporations

Recent details about the Greek debt crisis suggest a possible reversion to a national currency regime, with ramifications that could include currency controls. The speculation is that fear of such an outcome might spur repatriations of earnings and cash by U.S. corporations, with one possible consequence being an increment to funds available for domestic deployment, which could in turn stimulate the U.S. economy via increased capital investments and growth in employment.

Although the Greek crisis may yet have some marginal impact on U.S. corporations’ desire to maintain earnings of foreign subsidiaries outside the U.S., at this point in time there is little to suggest that there will be a material inflow of earnings and cash to the U.S. – and even if that were to occur, there is even less reason to expect that this will fuel domestic economic expansion. Past efforts to trigger repatriations of earnings have not directly impacted investment or employment, which depend much more on optimism about tax and other policies than on availability of low-cost financing.

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International accounting expert Dr. Barry Jay Epstein, CPA, CFF, is available to discuss the potential for earnings repatriation by U.S. corporations with operations in Greece or the Euro zone. He can be reached at 312-222-1400 or BEpstein@SSandG.com.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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